SIDECAR FILES and DNG
When working with raw files, for example, the edits that you make aren't usually saved to the file directly. Instead, they are saved as metadata in a sidecar XMP file. The problem is that if the XMP file and the raw file are separated by accident (during file transfers or whatever), all your edits are lost. There are a couple of workarounds to this. One is to require LR3 to save metadata directly into the file all the time. To my understanding, this will require additional processing power.
Another solution is to use DNG files. DNG is Adobe's raw format, and is supposed to be open source. When you use DNG, the metadata are saved directly into the file. One issue with DNG is that not all programs support it. For example, once a raw file is converted to DNG, it can't be opened by View NX2.
Another issue when working with raw files in Lightroom is that LR3 can't read makernotes. Makernotes are special additional EXIF data that are proprietary to each camera manufacturer. For example, Nikon records information such as flash settings (FEC, whether wireless is used, which channels were used and what mode each channel was in, etc.) and many other info. None of that can be read by LR3. That's a lot of lost and potentially valuable info. Plus, there are a lot of users (me included) who like the way Nikon files are processed in ViewNX2 and Capture NX2. To me, the images look the way they appear in the preview LCD of the camera. An unedited raw file looks better to me than the 'flatter' rendition in LR3 or Picasa.
DNG + JPEG
Many DSLRs offer the option of capturing photos as raw + JPEG. That's the option I prefer. Specifically, I just choose to save photos as raw + basic JPEG, then convert the raw to DNG on import to Lightroom.
Benefits compared to saving files in raw format only:
- DNG files have the metadata embedded, so there's no chance of losing your edits
- You get to see the makernotes in the basic JPEG file if you need it.
- If a photo is not exactly junk that you'd delete, but not necessarily a keeper either or a shot worth editing, you can just delete the raw version and keep the basic JPEG, which won't take up too much space.
- The incremental additional space that the basic JPEG takes up is minimal.